By a Newsnet reporter
Disgraced banker James Crosby, former boss of HBOS, has offered to surrender his knighthood and one third of his pension after being denounced by MPs for the “colossal failure” that led to the near collapse of the bank.
Mr Crosby said that he was also willing to give up 30 percent of his pension and either return it to shareholders or give it to charity.
The near collapse of HBOS meant that the bank had to be bailed out by the taxpayer to the tune of £30 billion.
Mr Crosby currently receives a pension of almost £600,000 annually from the bank, surrendering one third of it would still leave him with an annual pension of over £400,000, or more than 15 times the average annual salary for workers in the UK. Mr Crosby is understood to have sold most of his shares in the bank before it got into difficulties, earning millions of pounds as a result. Mr Crosby does not propose returning this money.
Giving up his knighthood makes Mr Crosby the first person in almost 100 years to voluntarily surrender the honour. Mr Crosby was awarded the knighthood for “services to banking” shortly after stepping down as HBOS chief executive in 2006.
Business Secretary Vince Cable is reportedly seeking to have Sir James and his fellow former HBOS executives, Lord Stevenson and Andy Hornby, barred from ever standing as company directors again.
In a brief statement, Mr Crosby said:
“In view of what has happened subsequently to HBOS, I believe that it is right that I should now ask the appropriate authorities to take the necessary steps for its removal.”
Replying to Mr Crosby’s announcement, a spokesperson for the Treasury said:
“This must be a matter for an individual’s conscience, but the Government believes it is right that this decision has been reached.”
However Mr Crosby would be aware that had he not given up the title, it was likely to have been stripped from him, as occurred last year to former RBS chief Fred Goodwin, whose knighthood was “cancelled and annulled” by the Westminster Parliament’s Honour Forfeiture Committee.
Stripping Mr Goodwin of his knighthood was criticised by certain politicians who had backed the banker during the boom years of the naughties. Former Labour Chancellor Alistair Darling said that the decision to remove the honour from Mr Goodwin appeared to have been taken “on a whim”.
Writing in the Times, Mr Darling described the decision to strip Mr Goodwin of his knighthood as “tawdry”, saying:
“There is something tawdry about the government directing its fire at Fred Goodwin alone; if it’s right to annul his knighthood, what about the honours of others who were involved in RBS and HBOS?”
He added that the decision risked harming the reputation of the UK amongst foreign businessmen, saying:
“We will be in an awful lot of trouble here if we go after people on a whim.”
The last person to give up a knighthood voluntarily was Nobel Prize-winning writer Rabindranath Tagore. The renowned poet, described as the Father of Bengali literature, renounced his knighthood in 1919 as a protest against the Amritsar massacre when British troops killed hundreds of Indian civilians.